Senate Passes Budget, Moves Closer to Tax Reform Consideration

The U.S. Senate Oct. 19 cleared a procedural hurdle to achieving a top Republican Party goal by passing a FY 2018 budget resolution that will allow the chamber to approve subsequent tax reform legislation by a simple majority vote. The measure is expected to next pass the House of Representatives.

Congressional budget resolutions typically set broad federal spending guidelines for a year and include assumptions about how those macro numbers could be achieved. Their adoption then initiates the annual appropriations process where individual programmatic spending levels are set. In addition to those routine functions, the FY 2018 resolution initiates a parliamentary process that will prevent Senate Democrats from using the chamber’s rules to require Republicans to pass tax legislation with 60 votes. The GOP has a 52-48 majority.

Unfortunately, the budget also assumes major cuts to Highway Trust Fund (HTF)-supported programs when revenues are unable to support existing spending levels in FY 2021 and beyond. Congress bankrolled the highway and public transportation investment levels contained in the 2015 FAST Act surface transportation program reauthorization law by supplementing incoming revenues with $70 billion from elsewhere in the federal budget. Those non-highway user fee resources are projected to be depleted by the end of FY 2020.

While GOP House budget resolutions routinely recommend aligning trust fund spending with incoming revenues, this is the first time the Senate has included the projected cuts as well.

The 31 national trade associations and labor unions in the ARTBA co-chaired Transportation Construction Coalition sent an Oct. 18 letter to senators raising awareness of the impending HTF crisis the budget calls for and urging them to pass a permanent trust fund revenue solution as soon as part of tax reform.

While the budget’s focus and goal is not the HTF, it should serve as another reminder of the looming trust fund shortfall that will begin its impacts in less than two years. Without an increase in HTF revenues, the Trump administration says $95 billion in highway and transit funding cuts will be needed through FY 2027. ARTBA and its partners will continue to push for a HTF revenue fix to be included in any tax reform or infrastructure package that moves out of Congress this year or next.